Hello, this is Yoshida of Mitsui Chemicals. Thank you very much for joining in our earnings announcement today. Today, we announced our financial results for the first quarter of fiscal year 2025 and our financial outlook for the first half of fiscal year 2025. Before we begin, I would like to express our sincere apologies for the concern and inconvenience caused by the gas leakage that occurred at our Omuta works on the evening of July 27. We deeply regret the impact this incident had on those who experience health issues, their families, nearby residents, various authorities, and our customers. We are currently conducting a thorough investigation in close coordination with the relevant authorities to determine the cause and assess the full scope of the impact. We are fully cooperating with their investigation and are committed to identifying the root cause as soon as possible.
Based on the guidance provided by the authorities, we will implement all necessary measures to prevent a recurrence. We will provide updates as necessary in a timely manner. Now, I will explain our financial results for the first quarter of fiscal year 2025 and our financial outlook for the first half of fiscal year 2025 based on the materials. Please see page 1. This page summarizes key takeaways from our first quarter earnings announcement. Sales in the specialty chemicals domains have been firm, contributing to solid progress in operating income before special items. Regarding business restructuring, we recorded losses in non-recurring items. This was due to the impairment losses recorded in the first quarter following the transfer of our equity interest in the phenols business in China, as well as losses on related business by advancing structural reforms in the specialty chemicals domains.
As a result, net income attributable to owners of the parent was JPY 0.7 billion in the first quarter and is expected to be JPY 7.5 billion in the first half of fiscal year 2025. Regarding the impact of U.S. trade policies, we did not observe a significant impact in the first quarter, and we consider that the direct impact we previously estimated to be limited. From the second quarter onward, we will closely monitor the indirect impact on demand, including the effect of pull-in of demand into the first quarter, and work to minimize their impact on profit through cost reductions and other measures. In mobility solutions, although the automotive production is slowing down, we will minimize its impact by leveraging our global sites. As for ICT solutions and life and healthcare solutions, we currently consider the effects to be limited.
Regarding the gas leakage at Omuta works, operation has been suspended for some plants, but there are no disruptions to product shipment for the time being. We will continue to assess its impact. Based on these circumstances, we are maintaining the dividend outlook announced at the time of our first quarter results. That is JPY 75 per share for the interim and JPY 150 per share for the full year. However, as the performance is progressing smoothly compared to the initial plan, we will continue to monitor the impact of U.S. trade policies closely, and if necessary, we will review the dividend amount at an appropriate opportunity. Please see page 2.
Operating income before special items for the first quarter of fiscal year 2025 decreased to JPY 26.6 billion, down JPY 3.6 billion or 12% compared to the same period of the previous year, primarily due to inventory valuation losses from lower naphtha prices in basic and green materials. In the specialty chemicals domains, operating income before special items rose to JPY 29.8 billion, up JPY 2.2 billion or 8% year-on-year, due to generally firm sales volumes, mainly in ICT solutions, despite losses from yen appreciation. Please see page 3. Regarding the outlook for the first half of fiscal year 2025, we expect the operating income before special items for the entire group to be JPY 49.0 billion, down JPY 3.8 billion or 7% compared to the same period of the previous year.
In the specialty chemicals domains, we expect the operating income before special items to increase by JPY 1.5 billion year-on-year to JPY 58.0 billion, mainly due to an increase in sales volume as in the first quarter. Regarding basic and green materials, operating income before special items is expected to decline by JPY 5.4 billion year-on-year. This is because negative factors such as inventory valuation losses from lower naphtha prices, as well as the impacts of major regular maintenance at Ichihara Works and low facility operating rates, are expected to more than offset the elimination of the negative impact of the Osaka ethylene plant failure in the previous year. We have not revised our outlook for the full year. Please see page 4.
Starting from fiscal year 2025, we have revised the segment to which the non-wovens business belongs from Life and Healthcare Solutions to ICT Solutions, as well as that of certain other affiliates from Mobility Solutions to ICT Solutions. Additionally, the segments for fiscal year 2024 are disclosed based on the reportable segment classifications after the revisions. Please see page 5. This section describes the trends in major markets related to our business in the first and second quarters of fiscal year 2025. First of all, the market environment for ophthalmic lens materials in relation to Life and Healthcare Solutions remains firm in both the first and second quarters. In relation to the agrochemicals market, although there still remain the effects of inventory adjustments in some regions, demand continues to remain firm. The first-half demand also remains firm compared to the same period of the previous year.
Next is the outlook for global automobile production volume related to Mobility Solutions. Regarding automobile production volume, we do not expect any significant changes in global production volume, despite the impact from reduced production in the North American market due to the uncertainty caused by U.S. trade policies. Next is the state of the semiconductor and smartphone markets related to ICT Solutions. In the semiconductor market, in addition to increased demand in the cutting-edge semiconductor market, demand is also recovering in other applications such as consumer, industrial, and automotive applications. On the other hand, demand in the smartphone market is expected to remain at the same level as the previous year. As for basic and green materials, operating rates are expected to remain low due to the continued unfavorable supply-demand environment in fiscal year 2025 and the impact of major regular maintenance. Please see page 6.
This is about the status of our major investment projects. The items in yellow are projects that start commercial operation or undergo optimization and restructuring from fiscal year 2025. All projects are progressing smoothly. As part of our optimization and restructuring initiatives, in addition to the transfer of our equity interest in the phenols business in China, we have also decided to shut down the phenol plant at Ichihara Works ahead of schedule in October 2025, instead of the originally planned fiscal year 2026. We will continue to actively pursue these efforts with a strong sense of urgency. Please see page 7. This is the summary of our financial results for the first quarter of fiscal year 2025. Sales revenue for the first quarter of fiscal year 2025 was JPY 415.4 billion, a decrease of JPY 34.1 billion compared to the same period of the previous year.
Operating income before special items was JPY 26.6 billion, a decrease of JPY 3.6 billion year-on-year. Net income attributable to owners of the parent was JPY 0.7 billion, a decrease of JPY 17.2 billion year-on-year, due to losses in non-recurring items associated with business restructuring. The exchange rate was JPY 145 to the dollar, representing an appreciation of JPY 11 year-on-year. Domestic standard naphtha price per kiloliter was JPY 66,300, a decrease of JPY 12,700 year-on-year. Please see page 8. This is the summary of a year-on-year comparison about operating income before special items in the first quarter of fiscal year 2025. In terms of volume, sales increased for Vision Care and agrochemicals due to firm demand. Sales of elastomers increased as we expanded our products into multiple applications and growth markets. Sales of semiconductor applications increased due to demand growth in the cutting-edge semiconductor market and overall recovery in semiconductor markets.
Terms of trade worsened due to losses from yen appreciation and inventory valuation losses from lower raw material prices, despite a temporary improvement in terms of trade in PP compounds driven by sales price revisions. Fixed costs and others contributed positively to overall operating income before special items, due in part to an increase in equity in earnings. Looking at the results by factor, within the JPY 3.6 billion decrease in operating income before special items compared to the same period of the previous year, the volume difference was +JPY 2.9 billion, terms of trade were -JPY 6.6 billion, and fixed costs and others were +JPY 0.1 billion. Please see page 9. This is sales revenue and operating income before special items by segment. The following pages provide a detailed explanation of the increase or decrease factors for each segment. Please see page 10.
Life and healthcare solutions reported operating income before special items of JPY 6.2 billion in the first quarter of fiscal year 2025, an increase of JPY 0.3 billion compared to the same period of the previous year. The volume difference was +JPY 1.2 billion. This is mainly due to the steady demand for Vision Care and firm sales of agrochemicals, particularly in the domestic market. Terms of trade worsened by JPY 0.9 billion, due to the impact of losses from yen appreciation on agrochemicals. Please see page 11. Mobility solutions reported operating income before special items of JPY 14.6 billion in the first quarter of fiscal year 2025, a decrease of JPY 0.9 billion year-on-year. The volume difference was +JPY 0.2 billion, mainly due to the expansion of our products into multiple applications and growth markets.
Terms of trade worsened by JPY 1.2 billion, due to the impact of losses from yen appreciation, despite positive effects from time lag in PP compounds. Please see page 12. ICT solutions reported operating income before special items of JPY 9.0 billion in the first quarter of fiscal year 2025, an increase of JPY 2.8 billion year-on-year. Volume difference was +JPY 2.9 billion, with sales volume increasing due to a recovery in semiconductor markets. Terms of trade were +JPY 0.1 billion, driven by an improvement related to fluctuations in raw material prices for some products, despite the impact of losses from yen appreciation. Fixed costs and others increased slightly due to the operation of a new plant. Please see page 13. Basic and green materials recorded an operating loss before special items of JPY 2.9 billion in the first quarter of fiscal year 2025.
Although the positive effects of business restructuring were seen, these were outweighed by the impact of inventory valuation losses from lower raw material prices, resulting in a JPY 6.8 billion decrease in operating income before special items year-on-year. The volume difference was -JPY 1.4 billion, affected by sluggish demand, including withdrawal of customers from the phenols business. Terms of trade worsened by JPY 4.6 billion, due to inventory valuation losses resulting from fluctuations in raw material prices. Fixed costs and others also worsened by JPY 0.8 billion, due to factors such as increased repair and maintenance costs caused by rising labor and material costs. Please see page 14. This is non-recurring items. Non-recurring items totaled -JPY 13.8 billion. This represents a deterioration of JPY 10.8 billion compared to the same period of the previous year.
In addition to the impairment losses following the transfer of our equity interest in the phenols business joint venture in China, we recorded losses in related business by advancing structural reforms in the specialty chemicals domains. The total impact of this equity interest transfer for the full year is projected to be a loss of approximately JPY 8.0 billion, as a realized gain of approximately JPY 4.5 billion is expected in the second half of fiscal year 2025 from translation adjustment related to the sale of the phenols business. Please see page 15. This is a consolidated statement of financial position. Total assets were JPY 2,108.3 billion, down JPY 45.7 billion from the end of March 2025, mainly due to a reduction in accounts receivable and inventories driven by the impact of lower raw material prices and regular maintenance, as well as measures to make the phenols business asset light. Please see page 16.
This is a consolidated statement of cash flow. Cash flows from operating activities were + JPY 45.4 billion. Compared to the same period of the previous year, we saw improvements mainly in working capital. Cash flows from investing activities were -JPY 24.7 billion. While we continue to make active investments, we are also progressing with the sale of affiliates as part of our business portfolio transformation. As a result, free cash flows were JPY 20.7 billion. Next, I will explain the financial outlook for the first half of fiscal year 2025. Please see page 18. This is highlights of the consolidated financial outlook for the first half of fiscal year 2025. Regarding the outlook for the first half of fiscal year 2025, we expect sales revenue to be JPY 818.0 billion, a decrease of JPY 72.4 billion compared to the same period of the previous year.
Operating income before special items is expected to be JPY 49.0 billion, a decrease of JPY 3.8 billion year-on-year, and net income attributable to owners of the parent is expected to be JPY 7.5 billion, a decrease of JPY 14.7 billion year-on-year. The exchange rate for the first half of the year is expected to be JPY 145 to the dollar, an appreciation of JPY 8 year-on-year. The domestic standard naphtha price is expected to be JPY 65,650 per kiloliter, a decrease of JPY 12,300 year-on-year. Please see page 19. This is our overview of the outlook of the operating income before special items in the first half of fiscal year 2025. The volume has been steadily increasing due to the increase in sales volume in the specialty chemicals domains compared to the same period of the previous year.
On the other hand, terms of trade are expected to be negative due to the impact of yen appreciation, inventory valuation losses in basic and green materials, and a decline in energy efficiency due to low operating rates of crackers and derivatives. We do not project fixed costs and others to significantly impact profit in the first half. While we anticipate an increase in fixed costs due to major regular maintenance at Ichihara Works, we expect this to be offset by the positive effect from improvement in equity in earnings and business restructuring. Consequently, the projected decrease in operating income before special items of JPY 3.8 billion year-on-year is attributable to a positive volume difference of JPY 9.0 billion and a negative terms of trade impact of JPY 13.0 billion.
The explanation is not significantly different from the financial results for the first quarter of fiscal year 2025, so I will omit the details. Please see page 20. This is our outlook for sales revenue and operating income before special items by segment. From the next page onwards, we will explain the factors behind the increase or decrease for each segment, but as the explanation is not significantly different from financial results for the first quarter of fiscal year 2025, I will omit the details. Please see page 21. Life and healthcare solutions operating income before special items has been steadily growing since fiscal year 2021, showing an approximate 20% growth per year in CAGR.
Regarding the outlook of this segment's operating income before special items for the first half of fiscal year 2025, we expect it to be JPY 14.0 billion, a decrease of JPY 1.3 billion from the same period of the previous year. The volume difference is expected to be +JPY 1.0 billion. We expect sales volumes to increase steadily, primarily in Vision Care and agrochemicals. Terms of trade are expected to be JPY 2.0 billion, due to yen appreciation. As for fixed costs and others, we are making progress in business restructuring in oral care. Please see page 22. Mobility solutions operating income before special items experienced a significant decline during the COVID-19 pandemic in fiscal year 2020. However, it has steadily recovered since then, showing an approximate 10% growth per year in CAGR.
Regarding the outlook of this segment's operating income before special items for the first half of the year, we expect it to be JPY 27.0 billion, a decrease of JPY 1.4 billion year-on-year. Volume difference is expected to be +JPY 2.0 billion, due largely to expanded sales of elastomers. Terms of trade are expected to be JPY 3.0 billion, mainly due to losses from yen appreciation. We are also steadily making progress in restructuring, such as rationalizing administrative functions in our solutions business. Please see page 23. Regarding ICT solutions, the semiconductor market experienced a boom around fiscal year 2021 due to the stay-at-home demand brought by the COVID-19 pandemic, but has since entered a prolonged adjustment phase. However, the recovery trend began around last year, and this trend is expected to accelerate in the first half of this year, with semiconductor-related materials showing growth, primarily in terms of volume.
We expect the outlook of this segment's operating income before special items for the first half of the year to be JPY 17.0 billion, an increase of JPY 4.2 billion year-on-year. We also recognize the need to closely monitor the trend of U.S. trade policies. Volume difference is expected to be +JPY 5.5 billion, as sales volume is expected to increase due to a recovery in demand for semiconductors. Terms of trade are expected to be JPY 0.5 billion, mainly due to yen appreciation. Fixed costs and others are expected to be JPY 0.8 billion, due to an increase in fixed costs associated with the operation of new plants for coating and engineering materials. Please see page 24. Basic and green materials have been in a tough situation since falling into a deficit in the second half of fiscal year 2022.
We also anticipate the outlook of this segment's operating loss before special items for the first half of the year to be worsened to JPY 8.0 billion, down JPY 5.4 billion year-on-year, mainly due to significant impacts by lower naphtha prices, major regular maintenance, and low operating rates. Although there will be an improvement of around JPY 7.0 billion from the elimination of the impact of the ethylene plant failure that occurred in 2024, we expect this to be outweighed by negative factors such as inventory valuation losses from lower raw material prices, the impact of major regular maintenance at Ichihara Works, and a decline in energy efficiency due to low plant operation. Please see page 25. Next, I would like to explain the increases and decreases from the first quarter to the second quarter by segment.
Operating income before special items in the first quarter was JPY 26.6 billion, and the outlook for the second quarter is JPY 22.4 billion. Therefore, we expect a decrease of JPY 4.2 billion from the first quarter to the second quarter. In the specialty chemicals domains, we expect to see a decrease in profit of JPY 1.6 billion overall, while life and healthcare solutions are expected to see an increase in profit due to the high demand season for agrochemicals in overseas markets. Mobility solutions are expected to experience a decrease in profit following the elimination of the gains from time lag in PP compounds in the first quarter. In ICT solutions, despite solid sales performance, we anticipate a decline in profit mainly due to a rise in fixed costs associated with the operation of a new plant.
In basic and green materials, we expect a decrease in profit mainly due to the impact of major regular maintenance at Ichihara Works. Please see page 26. This is the cash flows outlook for the first half of fiscal year 2025. Cash flows from operating activities are expected to be JPY 116.0 billion, while cash flows from investing activities are expected to be JPY 70.0 billion. As a result, free cash flows are expected to be JPY 46.0 billion. We will continue to work to optimize inventories and increase our cash generation capabilities. That's all for the explanation about our financial results for the first quarter of fiscal year 2025 and our financial outlook for the first half of fiscal year 2025. Thank you very much for your kind attention.